New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-08-25
A STOCK FIRM IN TROUBLE.
EMBARRASSMENT OF GRovEsTEEN & pEII.
BONDS HELD AS SECURITY FOR LOAN TO THEM
OFFERED FOR SALE UNDER THE RULE-THEIR

| BONDS HELD AS SECURITY FOR LOAN TO THEM
oFFERED FOR SALE UNDER THE RULE-THEIR
LIABILITIES NOT DEFINITELY KNOWN.
The Stock Exchange was disturbed toward the
close Of business yesterday by the embarrassment
of Grovesteen s. PelI. No. 60 Exchange place. The
chairman offered for sale under the rule" 500 600
first mortgage bonds of the East and West Rail-
road Of Alabama. which he had been ordered to sell
on account of the firms inability to pay the loan
to which they were collateral security. The bonds
have been selling recently at about 100, but they
were offered down to 65 without attracting buyer.
when Walter c. Stokes. of w. C. Stokes G. Co.,
who had ordered the sale withdrew the bonds.
formal announcement was not made by the firm in
DEFAULT but it was expected that it
would be made early to-day. The
members of the firm refused to say anything
about their difficulties and it was suspected that
they were preparing to seek assistance in the set
tlement of their affairs
The firm Is only few years old, and w. p.
Grovesteen. the board member. joined the Stock
Exchange less than six years ago. 1t has been
well understood for several weeks that 1t was over
burdened and its loans have been avoided as much
as possible by careful houses The trouble has
been that the loans were made up largely of tho
bonds that could not find buyer after decline
from 100 to 60 yesterday. The previous quotations
have been nominal apparently and the few sales
probably artificial. The bids have come generally
from The firm, or brokers employed by it for the
purpose of supporting the price. The bonds
have been put in loans at about
75 as a rule. but money blenders were aware
that the quotations were somewhat fictitious and
being ignorant of the real value objected TO max.
ing loans on the bonds, unless they were reinforced
partner is president of the East and West Railroad
OF Alabama, which Is narrow gauge road running
from Cartersville Ga. TO Pell City, Ala distance
of 120 miles, where 1t connects with the Georgia
Pacific. The property is bonded at the rata
of $4,000 and on some parts $4,000 mile:
Within week or two an additional amount of
5000 900 of the bonds were listed at the Stock EX-
change. making the issue outstanding $1,7O9,0 600.
Efforts have been made to sell the road TO lease
successful 1t is beiIeyed that the 100000
new bonds are all that are hsv,p pressing Ssa
marketed some time ago. The firm is supposed te
have the bulk of them and in the absence OF deh-
mite information Wall Street Jumped to the con-
cluson that the firms Liabilities would be from
100000 to $5OOOOO. The estimates made by
some persons were both above and below these hg-
ures. As abe trm has not been specially
active in stock speculation and has had few
customers it was thought that IT could
not have borrowed more than 5000, 600 on the
bonds and that its liabilities would not be much
larger. Other estimates were in excess OF
81, 600 600, but no indications of so large an ex-
pansion could be found.
The firm has kept an account with the st. NichO-
las Rank until about a month ago. when for satls-
factory reasons change was considered advisable:
Its account since then has been with the Bank OF
the state. Both banks have loans secured
by East and West Alabama bonds, but the amonuts
were not made public. President Edwards. of the
Bank of the state. said that he had refused to
tfy the firms checks yesterday because loan that
he had called had not been paid. 1t was rumored
in Wall Street that the firm had obtained certlfca-
tions on Tuesday TO the extent of 100000 in ex-
cess of its balance but President Edwards said the
firm had q small sum on deposit yesterday morning
He expressed regret that the embarrassment might
hcve been precptated by his refusal TO certify the
firms checks. but lie repeated that the non-pay-
ment of demand loan was the occasion for thus
action. At the st. Nicholas Bank ii was said that
the firm wanted larger line of certhcatIon than
the bank was willing To grant and for that reason
the account was virtually closed. 1t was admitted
that the bank still held loan of the firm, but 1t
was said 10 be amply secured.
George H. Pel is also vice. president of the Com,
mercial Telegram Company, the rival ticker
company to the Gold and Stock Telegraph Com
pany which is controlled by the Western Union.
He had taken active interest IN the contest be,
tween the two companies and has contrlbuted
something to its literature he was the Republi-
can candidate for Congress in the Xllth district
at the last election, but was badly beaten by W.
BOurke Cochran He and Mr. Grovesteen are mem-
har of savpral clubs-